And the credit ratings agency concluded that Michigan would likely be the big loser.

“The Detroit metropolitan area sends about 73% of its goods to Canada or Mexico. So the state of Michigan, particularly because of the auto supply chain, is heavily exposed to any changes.” — Fitch Ratings’ Michael D’Arcy

A report by Fitch states that Michigan’s economy is more interconnected with NAFTA partners Canada and Mexico than any other in the U.S.

The study estimates that almost two-thirds of exports from Michigan went to Mexico or Canada. It predicts that a new NAFTA deal could create new trade barriers that would lower sales and income tax revenue for both Michigan and the most populous region in the state.

“The Detroit metropolitan area sends about 73% of its goods to Canada or Mexico,” Fitch Ratings’ Michael D’Arcy says. “So the state of Michigan, particularly because of the auto supply chain, is heavily exposed to any changes…as a result of NAFTA being renegotiated in such a way that new tariffs are imposed.”

President Trump has threatened to add huge tariffs on products made in Mexico but sold in the U.S. as a way to return manufacturing jobs to Michigan.

Some Michigan lawmakers have also pressed for modernizing NAFTA, including addressing currency manipulation, to help preserve jobs in the state and create what they say would be a more even playing field among the trading partners.

Click on the audio link above to hear the full interview with Fitch Ratings’ Michael D’Arcy

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